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On this question of whether there’s really a credit crunch, Robert Samuelson writes:

“So, we’ve gone from too much credit to too little. Contrary to popular wisdom, banks — institutions that take deposits — aren’t the main problem. In December, total U.S. bank credit stood at $9.95 trillion, up 8 percent from a year earlier, reports the Federal Reserve. Business, consumer and real estate loans all increased. True, lending was down 4.7 percent from the monthly peak in October. But considering there’s a recession, when people borrow less and banks toughen lending standards, the drop hasn’t been disastrous.

The real collapse has occurred in securities markets. Since the 1980s, many debts (mortgages, credit card debts) have been “securitized” into bonds and sold to investors — pension funds, mutual funds, banks and others. Here, credit flows have vaporized, reports Thomson Financial. In 2007, securitized auto loans totaled $73 billion; in 2008, they were $36 billion. In 2007, securitized commercial mortgages for office buildings and other projects totaled $246 billion; in 2008, $16 billion. These declines were typical.

Given the previous lax mortgage lending, some retrenchment was inevitable. But what started as a reasonable reaction to the housing bubble has become a broad rejection of securitized lending. Terrified creditors prefer to buy “safe” U.S. Treasury securities. The low rates on Treasuries (0.5 percent on one-year bills) measure this risk aversion.

Somehow, the void left by shrinking securitization must be filled. There are three possibilities: (a) securitization revives spontaneously — investors again buy bonds backed by mortgages and other loans; (b) commercial banks or other financial institutions replace securitization by expanding their lending; or (c) the government substitutes its lending for private lending. Until now, it’s been mostly (c). “

So, nobody is buying securitized assets anymore. Which is hardly surprising for two reasons:

1. American needs to pay off some debts, so we’re buying fewer cars, etc.

2. The mortgage-backed securities fiasco shows that securitization too often equals secretization.

As the malaprop-prone brother-in-law (or, perhaps, the unnamed narrator) in my recent short story about the Housing Bubble in Southern California pointed out:

“In fact, I think I’m going to pick up one of these babies, too, and sell it in six months. We’ll be neighbors! Sort of. The mortgage company get a little snottier about down payments and interest rates when you tell them it’s an investment, so I’ll just check the “owner occupied” box. The broker doesn’t care. He gets his commission, then Countrywise bundles it up with a thousand other mortgages and sells it to Lemon Brothers. The Wall Street rocket scientists call this “secretization” because nobody can figure out what anything’s worth. It’s a secret.

“Lemon sells shares in the package all around the world. The Sultan of Brunhilde ends up owning a tenth of your mortgage. Do you think the Sultan’s going to drive around Antelope Valley knocking on doors to see if you’re really living there?”

The geniuses on Wall Street have finally figured out that they can’t use the Laws of Probability to convert a big pile of absurd IOUs into AAA securities. Worse, securitization means they can’t figure out how bad it is.

So, the question is whether the entire process of securitization is salvageable? Would increased transparency help? Wired has an article by Daniel Roth called “Road Map for Financial Recovery Radical Transparency Now!” about XBRL, a standardized set of tags to make financial documents easily comparable. I don’t know if this particular idea would work for securitized assets, but it doesn’t sound impossible to develop standards that would get the job done.

I worked for many years for marketing research firms that used the huge amount of data from scanned bar codes on supermarket products. The UPC code was developed by a private industry cooperative initiative in the 1970s and has proved such a huge success that it long ago became a seamless part of life.

Robert J. Samuelson writes about Gregory Clark’s A Farewell to Alms in the Washington Post. (My 2 part review of the book is here and here.)

Personally, I’m fairly optimistic about Third World poverty, in the absolute sense if not the relative sense. For example, telephones are hugely useful for getting things done, and the good news is that cell phone systems are much less dependent on having a functional culture than the old land line systems. The old systems required big bureaucracies that were reasonably honest and efficient, which many countries, including some Western European ones, couldn’t reliably manage. But you can have working cell phone networks in places as anarchic as 1990s Somalia.

My guess would be that technology will continue to evolve toward plug and play solutions that will work even in dysfunctional cultures like Nigeria. The U.S. burned up a lot of brainpower in the 1980s and 1990s figuring out how to use, first, PCs and then the Internet. (For example, I worked mostly on introducing PCs to my marketing research company from the fall of 1984 to the summer of 1988, and on introducing the Internet to the company from late 1994 to the end of 1996.) The whole world has benefited and will continue to benefit from these investments. Granted, the Nigerians have latched on to the Internet most famously for the purposes of fraud, so maybe that’s not the best example …

And then there’s the Secret Solution to African Poverty, the one that nobody talks about: get the men to work as hard as the women. By one estimate I’ve seen, from an African feminist organization, women do 80% of the work in sub-Saharan Africa. That’s probably biased, so let’s say it’s only 70%. So, if the men started working as hard as the women, and were on average as productive, that would boost output by 40%.

Washington Post columnist Robert J. Samuelson, whose writing generally concerns society-scale economic issues, had a much-remarked-upon piece this week, “Importing Poverty” (WaPo, September 5, 2007; also available in Newsweek) that prominently pointed out some obvious truths about America’s ongoing immigration madness.

Indeed, VDARE’s James Fulford wrote about Samuelson’s column here, and the Center for Immigration Studies’s Mark Krikorian briefly noted it here.

Amid the general approval from us immigration realists, apparently nobody remarked publicly on the one jarring clinker near the end of Samuelson’s op-ed:

“As for present illegal immigrants, we should give most of them legal status, both as a matter of practicality and fairness. Many have been here for years and have American children. At the same time, we should clamp down on new illegal immigration through tougher border controls and employer sanctions.”

Even if one agrees with Samuelson regarding “fairness,” one would think that the cognitive dissonance involved in writing such a statement would be overwhelming, especially for someone as savvy as Samuelson, who must have been about 40 at the time of the 1986 IRCA amnesty.

For if the social sciences ever become rigorous (as in Isaac Asimov’s Foundation trilogy), surely their First Law will acknowledge what everyone knows, that amnesties of illegal aliens beget further illegal immigration and subsequent amnesties.

Confirming data consistent with such a law keep pouring in. Consider a recent article by Paul Belien (proprietor of Brussels Journal) in the August 27, 2007 issue of The American Conservative. In “Let’s Not Go Dutch: Amnesty’s track record in Europe should discourage American imitators,” Belien tells us:

“Two years ago, when Spain announced a collective amnesty for illegal immigrants, the government in Madrid expected that the measure would apply to 300,000 people at most; 800,000 showed up.”

So it’s clear that one of the codicils to such a First Law is that every amnesty is much bigger than expected.

Belien goes on:

“Amnesties for illegal immigrants take place at regular intervals in Europe. Each time a government grants one, they invariably say that this will be the last and that from now on all illegal newcomers will be expelled. Of course that never happens.

“Since 1974, Western Europe has given permanent resident cards to over 5 million illegal immigrants. France has granted three major amnesties in the past 25 years. Spain has offered six in the past 15 years. Italy voted amnesties in 1988, 1990, 1996, 1998, and 2002. Last year, it agreed on another one that allowed over 500,000 people to stay—a figure the government now wants to expand to 1 million.”

There’s a second codicil: Amnesties also breed politicians (at least in liberal western societies) who are just bursting to declare sanctuary cities:

“Amsterdam, Rotterdam, Utrecht, The Hague, and Eindhoven—the five largest cities in the [Netherlands] — refuse to ‘organize manhunts on illegal immigrants.’ Ernst Bakker, the mayor of Hilversum, the town where [Pim] Fortuyn was murdered, told the Dutch press that providing the list of illegal aliens to the government amounts to ‘betrayal, informing.’ It reminds him of ‘Nazi methods.’”

Belien finishes with a flourish that could have been written for Samuelson:

“Some Americans might be inclined to think that an amnesty for illegal immigrants who have already been living in the country for many years might be a good idea, on the condition that it be the final one. But the European experience teaches us that governments always underestimate the number of people who can apply for an amnesty, and that amnesties do not close floodgates, they open them.”

Firing one more shot at the fish in this barrel, what Samuel Johnson said about second marriages applies as well for illegal-alien amnesties: Proposals such as Samuelson’s, above, amount to the triumph of hope over experience.

Robert Samuelson, noted previously in these pages as getting it, has a column today on MSN about importing poverty.

Samuelson: We’re Missing the Real Story on Poverty - Newsweek Robert Samuelson - MSNBC.com
Importing Poverty
We can’t ignore the facts. Only an act of willful denial can separate immigration and poverty

Web exclusive
By Robert J. Samuelson
Newsweek
Updated: 2 hours, 35 minutes ago

Sept. 5, 2007 - The government last week released its annual statistical report on poverty and household income. As usual, we—meaning the public, the media and politicians—missed a big part of the story. It is this: The stubborn persistence of poverty, at least as measured by the government, is increasingly a problem associated with immigration. As more poor Hispanics enter the country, poverty goes up. This is not complicated, but it is widely ignored

If you want to see who’s practicing “willful denial” you should read Ed Rubenstein’s column today, More Hispanic Happy Talk From The WSJ Edit Page.

More from Samuelson:

By default, our present policy is to import poor people. This imposes strains on local schools, public services and health care. From 2000 to 2006, 41 percent of the increase in people without health insurance occurred among Hispanics. Paradoxically, many Hispanics are advancing quite rapidly. But assimilation—which should be our goal—will be frustrated if we keep adding to the pool of poor. Newcomers will compete with earlier arrivals. In my view, though some economists disagree, competition from low-skilled Hispanics also hurts low-skilled blacks.

The words of Butch Cassidy come to mind when perusing the names of the 500 economists who signed an “open letter” on immigration (celebrated by, of course, the Wall Street Journal editorial page). The letter consists of the usual combination of sentimental flapdoodle and duplicitous doubledealing, such as confusing the debate over illegal immigrants by citing statistics on legal immigrants. Which might explain why, although the organizers got 500 people with doctorates in economics to sign, they signally failed to get most of the economists that the public has ever heard of.

Indeed, most of the best known economists have publicly expressed dissent with the open letter’s happy talk.

Here are five very famous American economists. Are they on the list?

Milton Friedman — No

Thomas Sowell — Not on the list

Paul Krugman — Negative

Paul Samuelson — Nada

Gary Becker — That’s a negatory good, buddy.

What about economists who specialize in studying the empirical effects of immigration?

George Borjas - Nein

Barry Chiswick — No way

How about Edward P. Lazear, Chairman of the President’s Council of Economic Advisors? — Nah

For quite some time it has been apparent that Robert J. Samuelson has been outstanding amongst those privileged to have Big Foot Columnist credentials because of his astuteness and candor on the Immigration issue. (The Gate Keepers mustn’t have checked on that.)

His latest column What You Don’t Know About the Immigration Bil,The Washington Post May 31 2006 is imperative reading (and dissemination) material for all those in the patriotic camp.

Samuelson’s central thesis–that the Senate bill represents a substantial acceleration of immigration–is not news to regular VDARE.com readers, but doubtless is to most of his.

But what is especially valuable is his critique of the dishonesty of the MSM coverage of the Senate debate:

“The Senate passed legislation last week that Sen. Edward Kennedy (D-Mass.) hailed as “the most far-reaching immigration reform in our history.” You might think that the first question anyone would ask is how much it would actually increase or decrease legal immigration. But no. After the Senate approved the bill by 62 to 36, you could not find the answer in the news columns of The Post, the New York Timesor the Wall Street Journal. Yet the estimates do exist…”

Samuelson is particularly irritated by the suppression of the Sessions/Rector news conference on the scale of the immigration increase:

On May 15 Republican Sen. Jeff Sessions of Alabama held a news conference with Heritage’s Rector to announce their immigration projections and the estimated impact on the federal budget. Most national media didn’t report the news conference…

He has an explanation:

Whether or not the bias is “liberal,” groupthink is a powerful force in journalism. Immigration is considered noble. People who critically examine its value or worry about its social effects are subtly considered small-minded, stupid or bigoted. The result is selective journalism that reflects poorly on our craft…

Perhaps this is plausible as far as the line journalists are concerned. But why do the editors permit it?

This is not the last word on the Bush 2006 Opening-the-Borders drive. But it is a fair start.

Read the comments made on the Senate floor May 19th by Alabama Republican Jeff Sessions : he charges that his colleagues had a “studied and carefully carried out a plan to conceal” the fact that S. 2611 would bring more than 100 million “unskilled workers” to America in the next two decades.

According to Sessions, “only three or four Senators” showed up for the single hearing allowed to discuss the population and wage impact of S. 2611.

Sessions wonders why the urgency to push S. 2611 through while limiting debate.

Then he answers his own question: he reveals that the Senators are saying among themselves that the important thing is to get a quick vote on S.2611, get it off the table, and let the House of Representatives bail them out by blocking it.

The entire Sessions speech is here.

UPDATE: Since the search link to Sessions’ speech may expire, due to the THOMAS system, I’ve put the whole speech below.

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We at VDARE.COM are naturally delighted that so many Establishment Right figures are finally speaking up about immigration. But you’ve got to watch them. A reader who is a veteran Rush Limbaugh student reports that Limbaugh was obviously rattled yesterday by a woman caller who challenged him on what to do about the illegals who are already here - and who would be not directly impacted by the border fence he is now advocating. Limbaugh accused her of being a “seminar caller” - a liberal plant. When she persisted, he finally conceded:

RUSH: Nobody is talking about deporting these people…Obviously. That’s the whole point. We’re not even talking about immigration [deportation] here. We’re talking about people that want jobs. There has to be a serious attempt with these twelve– Using your hypothetical, we’ve got the border shut, and the number of illegals that succeed in getting past is a trickle and not enough to worry about. What do we do? We have to assimilate them. We have to require them to acculturate, and that’s not hard to do, and we identify who they are and we let them stay and if they claim they’re here because they want to become Americans we give them the chance to do that, but we don’t put them at the head of the line, we don’t run them ahead of people playing by the rules. But the key to it is closing the border.

…i.e. no deportation.

Of course, this would be a disaster. Under current law, these 12 [or 20] million] would then be able to sponsor endless chain-migration of relatives. Conversely, there are many ways to cause the illegal population to self-deport, basically by removing government subsidies, taxing remittances and so on. In fact, Limbaugh could even have pointed out that a defended border would probably reduce the illegal presence, because many illegals commute back and forth, and might well elect to stay home.

As I’ve said before, there are immense unseen pressures on MSM figures to toe the immigration enthusiast line, and we should applaud any who show signs of courage. But, as also illustrated by the case of NRO’s recent stealth capitulation on legal immigration reform, we can’t put our trust in them.

Limbaugh transcript here.

I received about five million emailed copies of Robert J. Samuelson’s March 8 column in the Washington Post calling for a border fence. This morning (April 5), Samuelson has a softer column, The Immigration Impasse: A Way Out, dismissing the current House bill as “mean-spirited and delusional” and combining his advocacy of a fence with…re-emphasized advocacy of an amnesty for illegals currently here.

This doesn’t dismay me. When you follow a complex issue like the economics of immigration, as I have for some fourteen years, you get a sense of whether another writer knows the underlying technical literature. Samuelson does; Tamar Jacoby does not. That’s why I sent him a copy of Alien Nation when it came out in 1995.

But Samuelson didn’t acknowledge my generosity, and writes about immigration so rarely that each column is greeted as a revelation by the more naive immigration reformers, probably for the same reason: the immense political and peer group pressure that is brought to bear on any immigration critic in the MSM. One symptom of this is irritability with your putative but unfashionable allies, such as the House Republicans. Another is clumsy compromising, such Samuelson’s amnesty aberration, which obviously contradicts completely his concern for lower-income Americans and would just inspire more illegal immigration, like all previous amnesties.

Steve Sailer has blogged some incisive comments this morning on similar triangulating behavior from another Big Foot economics columnist who seems to have seen the light on immigration, the New York Times‘ Paul Krugman. (As usual with Steve when I’m not editing him, it’s buried under several tons of other interesting ideas - scroll to example 4).

Samuelson, of course, deserves vastly more credit than Krugman. He has been not just correct, but (fairly) courageous.

Stiil, the moral: put not your faith in MSM princes. Leadership in the immigration crisis has to come from outside the Establishment.